Americans feel more and more optimistic regarding the opportunities available for starting a new business. According to Glen Kessler of the Washington Post “…about 50 percent survive four or five years.” The odds may be even better than those reported due to a murky idea of why some businesses close. Not all close due to failure and some closures represent a well planned exit strategy from the work force.
Demographics have changed significantly for who is starting a business. According to Bloomberg Business, “People from ages 55 to 64 started 23.4 percent of companies in 2012, up from 14.3 percent of new entrepreneurs in 1996, according to the Kauffman Foundation’s research.” I do not believe this is accidental or merely reflective of a large population of baby boomers. Older american’s are not ready for retirement for a myriad of reasons. A desire for engagement, to be their own boss or because they are not prepared financially to retire as well as feeling that opportunities for interesting jobs have decreased with age. These entrepreneurs are making their own path and they are creating the work life they want based on who they are and what they enjoy. They also have experience. Experience is allowing many of them to pursue their dreams and feel that they will be successful. They believe they have the skills needed to run a business. There is also a prevalent belief that what they do not currently know, they will have the agility to adjust their course and make corrections along the way.
Younger americans, even those with previous entrepreneurial experience, are choosing to work for others rather than assume the risk inherent to starting a new business. According to the Wall Street Journal, “The decline in business ownership among young graduates also reflects a relatively low appetite for risk. Young people have less confidence, said Donna Kelley, a professor at Babson College. In an annual survey she oversees, more than 41% of 25-to-34-year-old Americans who saw an opportunity to start a business said fear of failure would keep them from doing so, up from 23.9% in 2001. “The fear of failure is the measure we should be most concerned about,” she said.” I agree with her. Starting a business is an uncertain future but potentially a great future for many. The fact that no venture can be assured and if fear is the case for a no-start, the loss of invention and job creation could be damaging to our fiscal and emotional economy. It also speaks to a confidence necessary to pursue and achieve success in many areas of life– not just a business life.
Whether you have been around the block or you’re at the beginning of your career, there are many reasons for optimism. According the U.S. Small Business Administration, “While corporate American has be “downsizing”, the rate of small business “start-ups” has grown, and the rate for small business failures has declined.”
Starting your own business can be a tremendous challenge. While the challenge itself may be half the fun, the other half can be daunting. Have a good strategic plan, know your market and the fundamentals of your business including delivery, productivity, resource assessment and clear operation policy need to be addressed.
Clear the path for your business and plan appropriately to achieve a bottom line must. It is also equally important as a business owner that you know your own bottom line. Fortify both and I’m betting you’re going to be in that 50% percent of success stories.